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May 5, 2014
Goodwill's New Use
A bustling Mid-Market intersection is heating up, and we caught wind of another major deal in the works. Related California and the City of S.F. are under contract to buy this for-sale Goodwill site at South Van Ness and Mission, according to sources. (Our source was not Macklemore's Thrift Shop, we learned our lesson the last time we did that.)
The nonprofit officially put its 2.3-acre SoMa S.F. HQ site earlier this year, making developers everywhere swoon over the prime piece of development at the bustling intersection. Goodwill previously said it's selling because a spike in job training and placement services, donations, and other business lines outstripped the capacity of the Mission Street store. They have been considering other sites to transplant the locale, ideally in the city.
Related didn't respond to a request for comment about the deal. In February we caught up with EVP Lydia Tan, who told us 2014 was going to be its banner year in NorCal. At the time, the plan called for 750 units—or seven projects—under construction this year. This year it scooped up 75 units in 15 public housing sites from the Berkeley Housing Authority, which it plans to renovate under a $36M plan by December. (They have to finish by then or it wouldn't be part of the banner year.) The team is also converting an old industrial site into a 316-unit mixed-use project in Potrero Hill.
Related's statewide portfolio consists of some 9,500 units, which includes The Century celeb-infused condos in LA (you might've seen its latest tenant on E!'s #RichKids of Beverly Hills or you didn't because you have a life). The Goodwill site could house some 600 units, we hear. So far it's unclear what part the city will play in the purchase. The nearby Honda dealership site, which we reported on Friday is selling to Crescent Heights, is going for about $50M, sources tell us.
Who's Rising The Most?
Now here's a fun fact: 50 Fremont experienced one of the biggest rent increases from Q1 2013 to Q1 2014 in the city, jumping 19% from $49.63 to $59.11, according to Cushman data provided to Bisnow. Last month, House Democratic Leader Nancy Pelosi joined Mayor Ed Lee in the building to announce the gigantic Salesforce lease across the street at First and Mission. (The actual Salesforce building will be large enough to fit Ed inside.) One of the most expensive buildings to call home is 101 Cal, which increased rents nearly 4% year-over-year to $75.39/SF.
Tech and energy hubs experienced some of the biggest rent increases over the year, according to Cushman head of research for the Americas Maria Sicola. Across the US, direct Class-A asking rents in Houston's CBD had the greatest increase quarter over quarter, jumping 9.1% to $41.98/SF, followed by S.F., which rose 3.8% to $60.20/SF. Gateway markets including New York, S.F. and Boston led the US with the lowest vacancy. Two submarkets had single digits: Midtown South New York (7.9%) and S.F. (9.8%).
Box's New S.F. Lease
In Friday's National Bisnow, we broke news that Box (left, its CEO Aaron Levie) is expanding its real estate footprint in S.F. and considering options for expansion in three other US cities. The cloud giant, HQ'd in Los Altos, just inked a 30k SF deal at 100 First. Box is also analyzing potential growth opportunities in Boulder, Raleigh, and Austin, Box general counsel Peter McGoff (and the head honcho of corporate real estate) told us. Cornish & Carey reps the tenant.
Who's The Richest Of Them All
Wonder who the richest real estate developer is in the US? It's not the orange-haired Donald you're thinking of; it's Irvine chairman Donald Bren, according to Forbes, ranking his $14.9B net worth No. 62 worldwide. Locally, Irvine's Silicon Valley portfolio encompasses more than 3M SF of office space in San Jose, Milpitas, Santa Clara, and Sunnyvale. In total, it's got some 50,000 apartments, 40M SF of office and 8M SF of retail, largely in SoCal. He's leaps and bounds above the next richest person in real estate in the US: Richard LeFrak and family come in at No. 215, with a $6.3B net worth, thanks to being one of the New York metro's biggest landlords. They also own properties in California and Washington state.
Meeting Up With Mark
We just caught up with Ritchie Commercial's Mark Ritchie at one of S.F.'s most iconic photo ops. His dad (and local real estate legend) John recently passed away. We'll have more on his awesome legacy later this week.